The verdict could impact about 1.5 lakh employees who have been recruited under the scheme in different government departments.

A division bench of acting Chief Justice Bhaskar Bhattacharya and Justice JB Pardiwala also told the state government to give regular salary benefits to all its fixed pay employees from the date of their appointment.

The Gujarat government has been employing people in various fields like police, education, forest department on a fixed pay basis, where they are given some basic fix pay for the first five years.

Such employees work on contract for the first five years and become permanent employee subsequently. The court told the government to discard the fixed pay employment scheme saying that it amounted to exploitation of new employees and against fair practice.

Petitioner Rajendra Shukla in his petition had contended that the fixed pay scheme was inhuman and new employees were being exploited by the state government.

In some cases the fixed monthly pay was as law as Rs 2,500, which violates labour laws of the state also, he had said. The high court dictate will have a major financial implication for the state exchequer as there are about 1.5 lakh fixed pay employees in different government departments.